How and when to issue delivery challan under GST – Transportation of goods without issue of tax invoice

1.0 Introduction

For every supply of goods or services under GST, the tax invoice is issued. However, there are certain transactions which are not treated as supply but are required to be transported from one place to another. E.g. sending the machine to one place to another place and receiving the machine back after completion of work, sending goods to another branch within state etc.

In all such cases, tax invoice cannot be issued because it is not a supply and hence delivery challan is required to be issued for all such cases. Let us understand the whole concept of delivery challan.

2.0 What is delivery challan under GST?

Delivery challan is a document which is necessary with transportation of goods from one place to another when the transaction is not treated as supply under GST. In other words, a delivery challan is issued when you are required to send goods or capital goods but GST is not applicable to that transaction.

Hence a delivery challan is a proof and list of the quantity of goods delivered when payment is not received on supply.

To make it easy to understand – an invoice is a bill of the sale purchase transaction between seller and buyer whereas, a delivery challan is a note provided by the seller to the recipient about the delivery of goods and that the goods being dispatched without payment of GST.

3.0 When to issue delivery challan

Delivery challan is issued for delivery of goods in the following situations-

• Supply of liquid gas with quantity unknown to the supplier
• Transportation of goods for job work
• Transportation of goods when the transaction is not treated as supply (i.e. tax invoice is not required to be issued).
• Such other supplies as notified by the board.

4.0 How to use delivery challan

Now that we know what are delivery challans let us also learn about how to use delivery challan. A prescribed format has been provided by the government for delivery note. Let us understand the step by step procedure on how to use delivery challan for transportation of goods:

#Step no.1 – Check whether transaction is a supply or not

The first step is to check whether the transaction is supplied or not under GST. This is because if the transaction is treated as supply under GST, then a proper tax invoice is required to be issued. In other words, for those transactions which are not treated as supply under GST, a delivery challan is required to be issued.

#Step no.2 – Create delivery challan containing proper details

As per GST rules, the following are the requirements to be followed in every challan:

• Date and number of delivery challan
• Name, address, and GSTN of the seller
• Name, address, and GSTN of the buyer
• HSN code describing the goods being delivered
• Quantity of the goods
• The tax value of goods
• Tax rate and amount. State, central and integrated
• Place of supply and
• Signature

These are the requirements necessary to be mentioned in the delivery challan

#Step no.3 – Create E-way bill

It is the most important point which you must not ignore. Any transfer of goods from one place to another shall require e-way otherwise the goods may be liable to be confiscated. Hence, kindly go through the complete concept of the e-way bill to properly send goods or capital goods under GST.

5.0 Conclusion

Go to our website for more information related to GST. More updates are coming soon. Stay tuned. You can always email us at info@hubco.in for any issue or problem.

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